Foreclosure Moratoria Gaining Traction Overseas
Here at HW, we've spilled a fair amount of digital ink covering the rising popularity of foreclosure moratoria as a response to a growing number of troubled borrowers here in the States -- but the idea of halting foreclosure activity is gaining traction overseas, as well, as borrowers outside of the U.S. are increasingly facing similar struggles with their own mortgages. The Royal Bank of Scotland said over the weekend that it would wait six months before initiating foreclosures on mortgages it owns in the UK; most foreclosures are usually initiated at 90 days into arrearages. The move by RBS was first reported by the Financial Times, and is sure to pressure other UK banks to put similar plans in place, much as the move to halt foreclosures has gained momentum for troubled US homeowners. The RBS moratoria was announced by CEO Stephen Hester in an op-ed published by the FT, as well. "[T]he difficult times ahead will be ones we all share," he wrote. "At RBS we will take seriously our duty to support our customers and try hard to avoid a repeat of the events that have weakened us." Hester acknowledged mistakes made by the bank and said "we made our share of mistakes (in hindsight) and are totally focused on recovering." The move by RBS follows similar moves to slow the pace of foreclosures, including an announcement by Fannie Mae (FNM) and Freddie Mac (FRE) to halt all foreclosures and evictions until after the new year. The GSEs own or guarantee roughly half of all mortgage debt in the United States. See earlier story. Write to Paul Jackson at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.